Bitcoin Could Fall To $25,000 As US Debt Ceiling Bears Down On Investors

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Bit­coin is still in a bear­ish trend even after US infla­tion data came out as expect­ed. The uncer­tain­ty that looms over the mar­ket this time around is tied to the US debt ceil­ing which is report­ed­ly reach­ing its lim­it. As it draws near, it is increas­ing­ly neg­a­tive for risk assets, which might see BTC drop back to $25,000.

US Debt Ceiling Looms Over Bitcoin

The effect of the climb­ing US debt ceil­ing is show­ing promi­nent­ly in not only the cryp­to mar­ket but in the stock mar­ket as well. In fact, it is Bitcoin’s high cor­re­la­tion with the stock mar­ket that has seen it go down as well in such mar­ket conditions.

Accord­ing to Trea­sury Sec­re­tary Janet Yellen, the US will hit its debt ceil­ing as ear­ly as June 1. This only leaves around two weeks before then, and investors are under­stand­ably wary at this time as hit­ting this debt ceil­ing could be cat­a­stroph­ic for the economy.

A like­ly out­come is that the US will increase its debt ceil­ing once more, as it has been doing since 1960. How­ev­er, it still leaves a lot of ques­tions to be answered regard­ing the econ­o­my. Thus, investors are more like­ly to play it safe dur­ing this time.

Risk assets such as stocks and Bit­coin are expect­ed to con­tin­ue to decline until June 1. A deci­sion regard­ing the debt ceil­ing would then deter­mine how investors approach the mar­ket from there. But there is no telling if it will be a pos­i­tive or neg­a­tive outcome.

Bitcoin price chart from

BTC struggling to hold above $26,000 | Source: BTCUSD on

$25,000 Remains Likely For BTC

If the price of Bit­coin con­tin­ues to decline into the next month, then the pos­si­bil­i­ty of hit­ting $25,000 remains high. The bulls are cur­rent­ly hold­ing sup­port at $26,000 but this hold is shaky at best. If bears were to increase their sell­ing pres­sure at this point, even by a small mar­gin, BTC would eas­i­ly break this sup­port and head back down to $25,000.

Bit­coin trad­ing under its 50-day mov­ing aver­age also sup­ports this bear­ish trend. But this is only valid for the short term. For the long-term basis, the dig­i­tal asset is still very much bull­ish, rang­ing above its 200-day mov­ing average.

If bulls are able to hold $26,000 into the new month, then the short-term out­look for BTC turns bull­ish. This would like­ly lead to a recov­ery and anoth­er ral­ly in price. If this hap­pens, then the cryp­tocur­ren­cy will eas­i­ly retake the $30,000 lev­el again.

At the time of writ­ing, BTC is trad­ing at $26,191, down 2.03% in the last 24 hours and see­ing 4.30% loss­es on the week­ly chart.

Fol­low Best Owie on Twit­ter for mar­ket insights, updates, and the occa­sion­al fun­ny tweet… Fea­tured image from iStock, chart from

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